Congress Uses Budget Crunch to Hurt Pensions

Crammed within the “we have to pass it, so you can find out what’s in it” over-a-trillion-dollars spending plan currently moving through Congress with no one but the lobbyists reading it is a section allowing pension plans to cut benefits to current and future retirees.

Here’s the beginning of the analysis from the Daily Bell blog: “So It Begins: Congress to Cut Pension Plans.”

“Congressional leaders hammer out deal to allow pension plans to cut retiree benefits … The measure would alter 40 years of federal law and could affect millions of workers. A measure that would for the first time allow the benefits of current retirees to be severely cut is set to be attached to a massive spending bill, part of an effort to save some of the nation’s most distressed pension plans.” – Washington Post

Dominant Social Theme: It is necessary to cut people’s benefits so that the state does not become insolvent.

Free-Market Analysis: This is huge news, and it’s definitely launched in a big way on the mainstream media.

As of this writing, the situation is still in flux but from what we’ve read this legislation is taking place. Even if it doesn’t happen this time, it’s part of a trend that will reoccur.

Yes, it is a really – really – big story. People’s savings and retirement benefits have been decimated by price and monetary inflation. They’ve lost their jobs and been forced out of their homes. And now the federal government is directly attacking pensions.

Those who fail to learn from history—and who borrow all of its most damnable ideas—are doomed to repeat its painful mistakes and outcomes:

There are stages that nation-states and empires go through as part of this process [of economic implosion, due to monetary malfeasance]. First, taxes are hiked and made more onerous. Then money printing increases and the currency is more rapidly debased. Finally, or simultaneously, state benefits are cut and even necessary services are eventually abandoned.

Oh, and you can bet Congressional pension plans and benefits will be exempt, of course.

P.S. As for the recommendations at the end of the post, obviously you have to make your own choices and decisions based on your priorities and wisdom. The one thing we know is that Congress has placed us on a trestle suspended high above a bottomless chasm, and a train is coming. Sitting in place is making a decision, and the outcome will not be pretty.